Pay day loan are typically brief, unsecured, short-title fund, tend to repayable on the borrower's second pay-day
< ¶>This appeal concerns the continued viability of payday lending in Ohio and raises questions regarding how payday loans fit within Ohio's current statutory lending framework.
< ¶> Ohio Legislative Service Commission, Payday Lending in Ohio, Members Only Brief, Vol. 130, Issue 1 () (“Payday Lending ”). The borrower generally writes the lender a check for the full loan amount plus all applicable fees and interest, postdated to the borrower's next payday, or authorizes the lender to electronically debit that amount from the borrower's bank account on the borrower's next payday. Id.; In re Meadows, 396 B.R. 485, 498 (BAP 6th Cir.2008), fn. 8 (Gregg, J., concurring), quoting Easha Anand, Payday Lenders Back Measures to Unwind State Restrictions, Wall Street Journal (), A6.
Payday loans are usually brief, unsecured, short-term financing, usually repayable into the borrower's next pay day
< ¶>To be sure, payday lending is controversial. Proponents argue that payday loans are necessary and less costly than other available alternatives for auto title loan South Carolina state low-income individuals to cover unexpected expenses. Opponents argue that the high costs of payday loans, combined with their short terms, trap borrowers in a cycle of debt, with borrowers often resorting to additional loans to pay off prior loans. Id. at 1–2.
< ¶>R.C. Chapter 1321 governs all manner of loans in Ohio; it includes the Small Loan Act, R.C. to , the Ohio Mortgage Loan Act (“MLA”), R.C. to , and the Short–Term Lender Act (“STLA”), R.C. to . We are concerned here primarily with the MLA and the STLA. In this appeal, we first consider whether the plain language of the MLA, and particularly the definition of “interest-bearing loan” in R.C. (F), precludes the issuance of single-installment loans. Next, we consider whether the more recently enacted STLA prohibits registered lenders under the MLA from making payday-style loans even if the plain language of the MLA otherwise authorizes those loans.
